CAP rips Luetkemeyer bill

FIRST LOOK: CAP RIPS LUETKEMEYER BILL — In a new letter out Tuesday, the Center for American Progress rips legislation on the House floor from Rep. Blaine Luetkemeyer that would allow the Financial Stability Oversight Council to ease restrictions on regional banks: “The changes [in H.R. 6392] reflect a breathtaking degree of historical amnesia, and a willingness to allow the U.S. financial system to recreate excesses that led to the Financial Crisis of 2008 and the Great Recession that it helped create. …

“When the housing price bubble burst, [medium-sized] banks were at the center of the collapse, rescue, and bailout. Countrywide, WaMu, Wachovia and more all experienced large losses … What is amazing, though, is that this legislation is being sold as a doing something helpful for the regional and community banks. Far from it.” Full letter. Full bill.

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DEMS INVOKE TRUMP AGAINST BILL — POLITICO’s Zachary Warmbrodt “Opponents of [the Luetkemeyer bill] … are pointing to Donald Trump as a big reason why Democrats should join the fight. … Critics of the bill are citing the fact that the next Treasury secretary, who would chair FSOC, will be appointed by Trump, who has pledged to dismantle the 2010 Dodd-Frank law that cranked up oversight of the banking industry. Trump will likely get to name additional regulators who will serve on the council.

“‘This is the first test of resistance to Trump, and to the Congressional majority’s pro-Wall Street agenda,’ Americans for Financial Reform senior policy analyst Alexis Goldstein said in an email to supporters Monday. ‘If members vote for Wall Street and against the rest of us on the floor, it will signal to Trump and his allies that there will be no fight against gutting Wall Street reform.’” Read more.

INDUSTRY LIKES IT — Via FSR’s Tim Pawlenty: “Assessing an institution through various factors, as opposed to asset size only, will allow for a more comprehensive assessment of risk to the overall financial system. H.R. 6392 advances that goal and it will lead to more effective regulations while also allowing financial institutions to help grow the economy and serve both consumers and businesses better.”

MORE ON BILL WALTON — MM last week introduced you to Bill Walton, the arch-conservative who leads Trump’s Treasury landing team. Bloomberg’s Max Abelson has more in a piece up Tuesday: “Walton was at the top of Washington’s finance establishment when he ran Allied Capital Corp. and sat on the Riggs Bank board alongside the city’s titans. Then the trouble began.

“Hedge fund manager David Einhorn accused Allied in 2002 of inflating the value of its holdings … A subsidiary that loaned to small businesses agreed to settle fraud claims with the Justice Department for $26.3 million in 2010, an executive went to prison and Allied … was sold … Walton, who wasn’t accused of wrongdoing, has mostly stayed under the radar since then, playing the villain in a short steampunk-themed Western and running a private equity firm that lists his wife and their terriers on its leadership page”

BIG TRUMP FUNDRAISER NEXT MONTH IN NYC — Via POLITICO’s Nancy Cook: “The Trump transition will hold one of its first major post-election fundraisers in New York City on Dec. 7, where the president-elect himself will make an appearance, according to the invitation obtained by POLITICO. The $5,000-per-head breakfast will raise money for Trump for America, a 501(c)(4) group funding the transition.

“The hosts include a slew of donors, potential Cabinet picks and transition team officials, including Steven Mnuchin (on the short list for Treasury); Wilbur Ross (top name for Commerce); Ray Washburne (leading the transition's landing team for Commerce); and Bill Hagerty (heading the presidential appointments team out of D.C.)” See the invite.

ATKINS CRITIQUED — Revolving Door Project’s Jeff Hauser emails: “Two ostensibly separate storylines intersect in the person of Trump transition power Paul Atkins, the founder of Patomak Global Partners. Not only is Atkins' power at odds with `drain the swamp' language few Morning Money readers ever took seriously, he also embodies how dangerously easy Trump's self-dealing could be.

“As Jesse Eisinger notes, Atkins is helping run Trump's transition while he and his firm are separately monitoring a settlement agreement by Trump creditor Deutsche Bank with the CFTC.” Read more.

GDP REVISION PREVIEW — Pantheon’s Ian Shepherdson: “Today's second estimate of third quarter growth comes just 15 days before the next month's FOMC decision, and it likely will show growth being revised up slightly, to about 3.25 percent from the 2.9 percent first estimate. Upward revisions to retail sales and inventories will do most of the work, the net result of which will be the fastest reported growth rate for a single quarter in two years.

“Looking ahead, it is still too early, we think, to take a hard view on fourth quarter growth. … [T]he Atlanta Fed currently expects growth to reach a startling 3.6 percent. If that proves correct, and if it is accompanied by decent payroll numbers and further increases in wage and price inflation — all good bets, in our view — then markets will start to bring forward the expected timing of the next rate hike”

TRUMP HOTEL CONFLICT? — Steven L. Schooner and Daniel I. Gordon in Government Executive: “As the clock ticks down towards … Trump’s Jan. 20 inauguration, the window is rapidly closing on the General Services Administration’s opportunity to extricate itself from the Trump Organization’s lease of the historic Post Office Pavilion. The lease — in which Donald Trump would, in effect, be both landlord and tenant — now presents unprecedented and intolerable conflicts of interest” Read more.

COULD THIS STORY CATCH ON? — Via a Dem consultant: “This story about Trump's GSA lease may be the thing that catches people's attention. The NY Times can have 6 reporters write an opus for the Sunday paper on his conflicts of interest and still not make a dent, but this story is small enough for people to understand. The lease says that no elected official can have an interest in the hotel, period. Let's see what happens.”

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DRIVING THE DAY — Trump meets with Sen. Bob Corker (R-Tenn.) among others during the day and dines with Mitt Romney … SEC's Equity Market Structure Committee meets at 9:30 a.m. … Federal Reserve Gov. Jerome Powell speaks at 12:40 PM on the economic outlook. … Second estimate of Q4 GDP at 8:30 a.m. expected to be revised up to 3.0 percent from 2.9 percent … Case-Shiller Home Prices at 9:00 a.m. expected to rise by 0.4 percent … Consumer Confidence at 10:00 a.m. expected to rise to 101.3 from 98.6.

MORE ON PAUL ATKINS — POLITICO’s Patrick Temple-West: “Atkins has one thing in common with … Trump: He doesn't hedge on his opinions. Atkins, a former financial regulator who is playing a major role in the Trump presidential transition, has railed against labor unions, environmentalists and gay rights groups for challenging public companies through shareholder activism.

“He has called companies ‘weenies’ who often ‘cave’ to social activists. And he was once the only one of 68 business leaders who refused to endorse a report recommending ways to combat ‘crony capitalism’ in Washington. Now Atkins, a Republican and onetime SEC member, may be in line to land a top regulatory post in the Trump administration. Atkins met with the president-elect in New York on Monday.” Read more.

TRUMP TWEETS THREAT … FT’s Shawn Donnan and Geoff Dyer: “‘Donald Trump has threatened to abandon US efforts to restore trade and diplomatic ties with Cuba unless Havana makes new concessions, setting the stage for a clash with a US business community eager to exploit the opening up of the island economy.

“‘If Cuba is unwilling to make a better deal for the Cuban people, the Cuban/American people and the US as a whole, I will terminate deal,’ Mr Trump tweeted on Monday, responding to a debate set off by the death on Friday of former Cuban leader Fidel Castro.” Read more.

… WHILE CUBA BOOMS — TheStreet’s Brad Keoun: “Cuba's longstanding dictator Fidel Castro barely got one foot in the grave and already investors are getting excited. “The Herzfeld Caribbean Basin Fund (CUBA), a closed-end fund known as the ‘Cuba Fund’ because of its ticker, surged as much as 17 percent intraday on Monday following the Cuban dictator's death on Friday. More than 1.8 million shares of the fund had changed hands by Monday afternoon compared with normal daily volume of about 22,000.” Read more.

IF THE PRICE IS RIGHT — NYT’s Robert Pear: “Trump has selected Representative Tom Price, a six-term Republican congressman from Georgia who has led opposition to the Affordable Care Act, to be secretary of health and human services, according to a transition team official.

“Some Republicans have attacked the Affordable Care Act without proposing an alternative. Mr. Price, by contrast, has introduced bills offering a detailed, comprehensive replacement plan in every Congress since 2009, when Democrats started work on the legislation.” Read more.

ROMNEY IN LIMBO - Washington Post’s Phillip Rucker and John Wagner: “Trump is for now unswayed by the extraordinarily public revolt by some of his top advisers and allies over the possible choice of Mitt Romney as secretary of state and continues to see his foe as a serious contender for the diplomatic post, several people briefed on the deliberations said Monday.

“Pence and some Trump advisers are said to have argued that Romney would be a steady hand prepared to help shape relationships around the world. Trump is said to have buried the hatchet with Romney at their Nov. 19 meeting in Bedminster, N.J., and sees a political benefit to bringing him into the administration: silencing a rival Republican who has a big microphone and a network of wealthy donors.” Read more.

“In a Facebook post on Monday, Warren, a frequent critic of the banking industry, said Wells Fargo's promise to treat customers better in light of the scandal is "meaningless" as long as it is pursuing arbitration.” Read more.

CITIGROUP SUED — “A former Citigroup Inc financial adviser on Monday filed a lawsuit accusing the bank of running a ‘boys' club’ that favored men over women, treating her as a "glorified secretary," and firing her in retaliation for whistleblowing activity.

“Daly said she also filed a complaint with the U.S. Equal Employment Opportunity Commission, and plans to add federal discrimination claims against the fourth-largest U.S. bank.” Read more.

BYE BYE LEVERAGE — POLITICO EU’s Cynthia Kroet: “The U.K. is unlikely to be given access to the EU’s single market after it leaves the bloc, according to a memo carried by a Conservative Party adviser.

“The note suggests that Britain will opt for a ‘Canada plus’ trade deal with the EU, adding that remaining a member of the European Economic Area would be ‘not good.’ A so-called Norway model seems unlikely too, according to the notes.”

“The bank cutoffs are the latest blow for the beleaguered industry after the CFPB in June proposed strict new rules meant to rein in abuses in the payday lending market and other small-dollar loans.” Read more.

DOGFIGHT — POLITICO’s Doug Palmer: “The WTO handed the European Union a partial victory Monday in a long-running, high-stakes battle with the United States over subsidies for aircraft manufacturers Boeing and Airbus, but the two sides immediately clashed over the size of the win.

“Monday's ruling is the latest chapter in a dispute dating back to 2004 that could finally come to a head during the Trump administration through either a negotiated settlement or a damaging WTO-sanctioned trade war.” Read more.

BLOOD BATH — WSJ’s Christopher Weaver, John Carreyrou and Michael Siconolfi: “Theranos Inc. received much of its funding from high-profile private investors who weren’t part of the ecosystem that typically backs startups and could see their stakes wiped out by the blood-testing company’s regulatory and technological troubles, people familiar with the matter said.

“Those investors include Rupert Murdoch and family-controlled Cox Enterprises Inc., which put about $100 million each into Theranos, people familiar with the matter said.” Read more.

RICKETS FOR TOP TRUMP JOB? — POLITICO’s Natasha Korecki: “Cubs co-owner Todd Ricketts said on Monday that it is ‘an honor’ to be under consideration for a top post in the Trump administration. He met with the president-elect last week. Trump has discussed naming Ricketts as deputy commerce secretary. Ricketts is the son of billionaire TD Ameritrade founder and conservative donor Joe Ricketts, and the brother of Nebraska Gov. Pete Ricketts, a Republican. Another brother, Tom Ricketts is chairman of the Cubs” Read more.

ANGEL INVESTORS LOBBY TRUMP TEAM — In a memo to Trump’s transition team, the Angel Capital Association argued among other things for “keeping the accredited investor the definition the same and allowing people to be considered accredited through experience”

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About The Author : Ben White

Ben White is POLITICO Pro's chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.

Prior to joining POLITICO in the fall of 2009, Mr. White served as a Wall Street reporter for the New York Times, where he shared a Society of Business Editors and Writers award for breaking news coverage of the financial crisis.

From 2005 to 2007, White was Wall Street correspondent and U.S. Banking Editor at the Financial Times.

White worked at the Washington Post for nine years before joining the FT. He served as national political researcher and research assistant to columnist David S. Broder and later as Wall Street correspondent.

White, a 1994 graduate of Kenyon College, has two sons and lives in New York City.